Pezesha targeting 60,000 low income farmers with their Financial
Education in Embu county

Content contributed by Pezesha

In a bid to bring sanity and security to Kenya’s ‘lending craze,’ Financial Education is at the heart of Pezesha’s digital marketplace. This October, they ventured to Embu to launch their official curriculum Pezesha Academy, in collaboration with Akili Group, an institution focused on value addition and training for farmers.

Members of Akili Group’s farmers network attending the 2 days of Pezesha Academy in Embu

The rise of FinTech in Kenya, and more specifically the boom of lending apps, has made access to credit easier and quicker than ever before. And whilst the widespread adoption of mobile money is clearly having a positive impact across the country, the elimination of traditional barriers to loans means that many people are accessing credit without truly knowing what they are getting into. That 2.7 million have been negatively listed on Kenya’s credit bureau in the last 3 years strongly suggests that a huge proportion of borrowers do not know what they are getting themselves into when taking out loans.

Studies in East Africa by CGAP support this — 85% of loans in their Tanzanian sample had not been repaid within 90 days, and 19% of those surveyed admitted not understanding the terms and conditions of their agreements.
The need for strong financial management is further exaggerated in a continent such as Africa, where a huge proportion of jobs are to be found in the informal sector. Income is sporadic and vulnerable to the effects of unforeseen circumstances such as drought, floods and theft of livestock, and so skills such as budgeting, planning and saving are even more critical in such
unpredictable circumstances.

“As such, at Pezesha we believe it is our responsibility to couple our provision of easy access to finance with the requisite know-how on how to use it well. And beyond that, provide education on how to manage credit thereafter, enabling the borrower to access better and better loan terms, climbing the ladder to financial freedom in a responsible manner,” adds Adam from Pezesha.

Pezesha are partnering with Akili Group to empower 60,000 farmers in Embu with their service offerings, and last week they began with a 2 day course on the core components of Financial Education. In a curriculum that has been modelled on data gathered from Pezesha’s interactions with over 20,000 individuals, participants were taken through modules on Credit Scores, Budgeting, Saving & Investments and Effective Debt Management.

One of Pezesha’s trainers demonstrates to farmers how to receive and improve their credit score through Pezesha’s SMS platform.

Reactions to the program were positive with 78% responding positively when asked if they had learnt something new, and 82% when asked if they felt they had learnt something that will help them grow their business.

Using further data collected from participants, the program will be iterated, fine-tuned and, in collaboration with Akili Group’s networks, expanded to reach the 60,000 farmers in Embu by end of 2019.

Eventually, Pezesha Academy will be inductive in a digital way that allows digital lenders to add it as part of their lending applications to allow scale, and so enable as many borrowers as possible to make sound financial decisions.

“Our mission is financial inclusion for all. And financial inclusion does not stop at access to financial services; without the knowledge and skills to manage money effectively, access is not only meaningless, but can do more harm than good,” Pezesha’s Adam continues.

“Though encouraging, our trip to Embu was just the beginning. We are excited to equip those who need it most with knowledge that can really transform their lives, and help to create a responsible and secure lending marketplace that benefits all.”